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IOD Special Talk - India’s Impact on Global Aviation: Air India's Ascent
Good morning, everyone. When the Tata Group took over Air India in 2022, The Economist magazine called it the Everest of corporate turnarounds, and given the state of the airline after decades of underinvestment and neglect, it was a very apt description.
We're now at the halfway point of a five-year turnaround, program of rehabilitation and resuscitation and transformation, and I'd like to give you a little insight into the journey so far, some of the progress and challenges, and a glimpse of the road ahead, and I think the relevance of it to this audience is because we've heard of some of the macro trends and uncertainties in the world. We have heard of India's national story and the growing pains that occur therein, and this corporate story, I guess, gives a good example and a context for when all of these trends come together and require governance and leadership to steer a ship through some pretty turbulent seas.
To rebuild an airline, we needed to develop a contemporary competence, rebuild a leadership team, establish a strong board, institute proper governance, change the culture, and implement all the myriad things that underpin a good company.
As India's propensity to travel tracks the course of earlier emerging nations, India's impact on global aviation will be enormous. The Indian domestic aviation market is already the third largest in the world and it's growing by 7% per annum.
So we're now at the halfway point of our five-year transformation journey to restore Air India to the class it once was, and our name for this program is Vihaan which in Sanskrit is dawn of a new era. Our ambition under this program is to dramatically grow Air India's fleet, both wide-body and narrow-body, and greatly expand our global network to essentially double Indian Airlines' market share to at least 30% on international routes to and from India, and for Air India to exceed 30% on the domestic market.
We want to be recognized as a world-class airline serving global customers with a profoundly and proudly Indian heart, and to attract the best talent by becoming India's aviation employer of choice. So turning around an airline from such a sorry state and attaining such lofty objectives could never be achieved overnight or easily, and so had to be a journey of phases. The first two we called taxi and take-off, and these focused on triage, fixing the basics, resolving legacy issues, preparing to scale massively, and building an understanding of what good looked like.
It also involved wholesale replacement of systems, updation of processes, and recruitment of talent, as well as relentlessly changing a culture through governance, communication, training, and discipline. We have recently moved on to the climb phase of this process, which focused on achieving excellence in operations, customer experience, and business performance. And by the end of Vihaan's five years in mid-2027, we hope to have delivered the new Air India.
I'm proud to say that from a position where these teams were wholly unaware of what world-class meant, they are now clear, confident, and are not just delivering, they're actually now starting to challenge what the definition of world-class is. There are hundreds of examples of progress, but if I can call out a couple of the higher order ones, we have refreshed the entire leadership team with some of the best talent from other Tata Group companies and from airlines such as Singapore Airlines and Emirates.
The board has been entirely reconstituted and now boasts some of India's most respected business names. This transfusion has given us a contemporary set of skills and mind-sets and has allowed us to start embedding a culture of performance, compliance, meritocracy, and customer-centricity.
Moving beyond the airline itself, we have had to address structural challenges in the Indian aviation ecosystem. Airlines worldwide were impacted, devastated by COVID, which all but shut down the global industry, and every airline has suffered its share of challenges while ramping back up. But as you've heard, Air India was not just ramping back up.
These challenges were significant, but expected. Their redressal was largely in our control. Unfortunately, some of the challenges have been out of our hands.
But it's indeed very timely for Indian aviation to start claiming more recognition and more attention on the world stage. For as the world's most populous economy continues to deliver 6 or 7% annual GDP growth, as India plays a greater role in de-risking global supply chains, and as India's propensity to travel tracks the course of earlier emerging nations, India's impact on global aviation will be enormous. The Indian domestic aviation market is already the third largest in the world and it's growing by 7% per annum.
It is expected to keep doing so until 2041, by which time it will have grown threefold. The international market to and from India, which hitherto has been grossly underserved by Indian players, is currently growing even faster than that. At 300 aircraft, Air India's fleet is now larger than British Airways, or Singapore Airlines, or Qatar Airways, and carries more passengers every year.
Incredibly though, whereas those airlines have reached maturity, we are just at the beginning of our growth journey, given India's economic and demographic trajectory. Over the next five years, the Air India group will double in size, following an annual capacity growth rate of about 15%, and adding about 40 international destinations to our route map. And more than ever before, India, its airlines, its governments, its airport, is cognizant of the catalytic power of aviation to drive economic and social development, and that India has the same geographic opportunity as here in Dubai or other major hubs to carry people through, not just to.
Air India can be an airline for the world, an airline that people choose to fly, not because they are Indian, or because they are traveling to and from India, but because it's an airline that is great. The center of mass of global aviation is driven by economics, technology, demographics, geography, and politics, and it doesn't stay still. But right now, that center of mass is moving toward India, and that is why we at Air India are so excited about the opportunity.
We want to be recognized as a world class airline serving global customers with a profoundly and proudly Indian heart, and to attract the best talent by becoming India's aviation employer of choice.
Of course, it is the nature of any national airline to receive its share of commentary, sometimes deserved and sometimes not so much, and we are acutely aware of expectations. But I can assure you that wherever you go in Air India, the energy and enthusiasm, the sense of mission and purpose remains palpable. And there are hundreds of examples of this that I could cite, but perhaps the best articulation was from one of our cabin crew, who said, I loved working at Vistara, but now I fly for an airline that carries my country's name, and I can make it proud.
Thank you.
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Institute of Directors India
Bringing a Silent Revolution through the Boardroom
Institute of Directors (IOD) is an apex national association of Corporate Directors under the India's 'Societies Registration Act XXI of 1860'. Currently it is associated with over 30,000 senior executives from Govt, PSU and Private organizations of India and abroad.
Owned by: Institute of Directors, India
Disclaimer: The opinions expressed in the articles/ stories are the personal opinions of the author. IOD/ Editor is not responsible for the accuracy, completeness, suitability, or validity of any information in those articles. The information, facts or opinions expressed in the articles/ speeches do not reflect the views of IOD/ Editor and IOD/ Editor does not assume any responsibility or liability for the same.
